David Company Uses the Gross Method to Record Sales Made

question 111

Multiple Choice

David Company uses the gross method to record sales made on credit. On June 10, 2014, it sold goods worth $200,000 with terms 2/10, n/30 to Charles Inc. On June 19, 2014, David received payment for 1/2 of the amount due from Charles Inc. David's fiscal year end is on June 30, 2014. What amount will be reported in the financial statements for the accounts receivable due from Charles Inc.?

• A) $98,000.
• B) $100,000.
• C) $200,000.
• D) $196,000.

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Definitions:

Unemployment Insurance

A government-provided benefit offering temporary financial assistance to unemployed workers who meet certain eligibility requirements.

Mutual Fund

An investment vehicle that pools money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Brokers

Individuals or firms that act as intermediaries between buyers and sellers in financial transactions, earning a commission for their services.

Index Funds

Mutual funds or exchange-traded funds that aim to replicate the performance of a specific market index by holding the same stocks in the same proportions.